wow, there is alot of really technical info on the net about it but here is some info thAt can help us understand, i take form this info below that the lack of heat transfer the better it insulates but i am not totally sure that "Koolfoam" is the standard polystyrene.
FROM KOOLFOAM WEBSITE
The polystyrene walls occupy only about 2% of the total volume: the rest is air which is trapped in the cells and cannot pass from one cell to another. Still air is an extremely poor conductor, so that little heat can move from one cell to another and the alternative paths along the thin polystyrene cell walls are equally unsuitable for rapid heat transfer.
The thermal conductivity of cellular materials made from Koolfoam varies with density, and with temperature. Within the normal density range of material used in building the variation of conductivity with density is comparatively small.
At 10°C the thermal conductivity of expanded Koolfoam of density 20kg/m is 31-36 mW/m.k. However, in carrying out insulation calculations for heated buildings it is usual to use the same nominal value for all densities and temperatures, eg the value of 30 mW.m.K.